FTX continues its efforts to restructure the company and exit bankruptcy.
FTX, the bankrupt cryptocurrency exchange, has sought legal measures to exempt its Dubai division from ongoing restructuring processes in the United States.
In the legal document submitted on August 2nd, the crypto exchange maintained that the Dubai branch had not engaged in any business operations that would warrant its inclusion in the bankruptcy restructuring.
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As the court prepares for its initial hearing on the matter, scheduled for August 23rd, the filing revealed that FTX Dubai's solvency on the balance sheet can be converted into voluntary liquidation in line with UAE laws.
FTX Dubai is owned by the European division of FTX, possessing a virtual asset service provider license granted by Dubai's Virtual Assets Regulatory Authority (VARA). With approximately $4.5 million in various accounts, the majority of this money, $4 million to be exact, is confined by VARA as collateral for the said license.
The unique positioning of FTX Dubai under UAE law was further highlighted on July 25th, when VARA verified to FTX Dubai's management that the confined funds would be liberated in tandem with the liquidation process.
All of FTX Dubai’s assets are located in the United Arab Emirates and substantially all of FTX Dubai’s prepetition activities occurred in the United Arab Emirates, the Debtors have determined that a timely local voluntary liquidation of FTX Dubai in accordance with the laws of the United Arab Emirates is in the best interests of the Debtors and their estate.
If approved, FTX Dubai must reach an agreement with the chosen liquidator, ensuring proficient liquidation and administration.
FTX filed for bankruptcy on November 11th, 2022, initiating bankruptcy proceedings for a staggering 102 associated global entities.
The recent legal motion to exclude the Dubai unit reflects a complex landscape of international regulations and business considerations, underlining the intricate nature of global bankruptcy and liquidation procedures in the rapidly evolving cryptocurrency sector.
